EXAM #3: (Ch 8, 9) Review Flashcards
1
Q
Internal controls
- What are they? What purpose do they serve? What are some examples? What legislation requires internal controls?
A
2
Q
Cash:
- Terminology like petty cash and cash equivalent.
A
3
Q
Cash:
- What items does cash include?
A
4
Q
Cash:
- What items do Cash equivalents include?
A
5
Q
Cash:
- How is cash reported on the balance sheet?
A
6
Q
Cash:
- Identify the items to be reported as cash.
A
7
Q
Cash:
- What is a bank reconciliation?
A
8
Q
Cash:
- Why do you bother to prepare a bank reconciliation – aren’t banks perfect?
A
9
Q
Cash:
- Be able to prepare a bank reconciliation & identify which items require an adjusting entry.
A
10
Q
Receivables:
- What are Receivables?
A
11
Q
Receivables:
- Understand the various types of receivables - (notes, accounts, interest).
A
12
Q
Receivables:
- How are receivables reported in the financial statements (which financial statement and at what amount)?
A
13
Q
Receivables:
- What are the Advantages of a note receivable over an account receivable?
A
14
Q
Accounts receivable
How do you caclulate Net Realizable Value?
A
Accounts Receivable
(Allowance for Doubtful Accounts)
= Net Realizable Value.
15
Q
Accounts receivable
The problem with accounts receivable is that some customers won’t pay their balance due. With the Allowance method for recording bad debts, you estimate the amount of your future bad debts each year and record that expense in the year of sale. This matches the bad debt expense with the related revenue and provides a more realistic value of what the receivables are truly worth -> the Net Realizable Value.
A
